Clunker

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DEFINITION of 'Clunker '

A popular reference to the old vehicle traded in under the U.S. government's "cash-for-clunkers" program, rolled out in 2009, for a newer more fuel efficient vehicle. For a "clunker" to be eligible for the program it must have satisfied four conditions:

1) It has to be in drivable condition; 2) It has to have been continously insured for one year prior to the trade-in; 3) It has to have been manufactured more than 25 years ago on the date of trade in;4) It has a combined fuel efficiency of 18 miles per gallon or less.

INVESTOPEDIA EXPLAINS 'Clunker '

The cash-for-clunker program in the U.S. offered drivers of old "clunkers" up to $4500 voucher for trading in their old car for a newer fuel-efficient vehicle. If an old vehicle was worth more than $4500, then the program would not have been beneficial as the vehicle owner could have just sold their car to the dealer.